Sprint buys Chicago, St. Louis markets from US Cellular in spectrum grab

Playing catchup with Verizon, AT&T 4G LTE rollouts.

Sprint has agreed to buy several central Midwestern markets from competitor US Cellular, the companies announced Wednesday. Sprint hopes to use the $480 million cash acquisition to boost its business in the Midwest and stay competitive with rivals Verizon and AT&T.

The 20MHz of spectrum in the 1900MHz trading hands in the deal will help fill out both Sprint’s 3G and 4G LTE coverage in areas including Chicago, Illinois; St. Louis, Missouri; South Bend, Indiana; and parts of Michigan and Ohio. The transaction will place 585,000 of the roughly 5.8 million US Cellular customers under Sprint's umbrella.

This deal comes quickly on the heels of Sprint’s merger with SoftBank of Japan, which gave the Japanese telecom a 70 percent stake in the company for the price of $20.1 billion. Sprint pitched this move as a way to improve 4G LTE coverage, as well, indicating that it’s anxious to try to meet the blistering pace of Verizon’s LTE rollout, as well as catch up to the slower AT&T.

The transaction will require the approval of the Department of Justice and the Federal Communications Commission before any money trades hands. Sprint expects both its SoftBank and US Cellular deals will go through in mid-2013. According to Reuters, US Cellular, the sixth largest carrier in the US, will carry on with business as usual in its other markets, including Iowa, Wisconsin, Maine, Texas, and Oklahoma.

Promoted Comments

US Cellular has put out a website with a map showing what area is being affected; it's a relatively small fraction of their total PCS spectrum. I assume the primary motivation is Sprint trying to fill a hole (or thin area) in its coverage.

20 Reader Comments

US Cellular has put out a website with a map showing what area is being affected; it's a relatively small fraction of their total PCS spectrum. I assume the primary motivation is Sprint trying to fill a hole (or thin area) in its coverage.

Is this evidence of the new boss at Sprint re-energizing the company? The only reason I'm not switching away from Sprint is my very good experience with SoftBank in Japan and I am interested in what he will do to the company.

Hardware procurement tends to have relatively long lead times when there're only a small number of customers. If Sprint previously cut it's purchase rate of LTE base stations the manufacturer would have slowed its' production rate and now Sprint can't change it's mind and have a few thousand more delivered via next day freight. Deals like this just require a few suits to shake hands and pass a check to initiate; getting the deal signed is something where throwing money at the problem will help. The regulatory reviews and potential need to switch customers to different hardware after the deal is approved means that they need to start the deals well in advance of when they actually want to be able to do anything with the acquisitions.

US Cellular has put out a website with a map showing what area is being affected; it's a relatively small fraction of their total PCS spectrum. I assume the primary motivation is Sprint trying to fill a hole (or thin area) in its coverage.

Its a small area but it's also their entire home market (U.S. Cellular is based in Chicago), where they bought naming rights to Comiskey Park. Also looking at that coverage map, Chicago had to have been their largest retail market.

A regional carrier that no longer operates in its own backyard is just looking for a complete buyout.

"In the fourth quarter (2007), U.S. Cellular agreed to deliver personal communication service (PCS) spectrum in eight licenses covering portions of one state to Sprint Nextel in exchange for more strategically useful spectrum in eight licenses covering portions of four states."

What does US Cellular have to do with IPCS? A little birdie (actually, someone at iPCS) told me that this additional 10Mhz of spectrum was for Central Illinois (between Chicago and St. Louis). So that one state in the news release is Illinois. This will allow iPCS to roll out 3G, since it really couldn't do it only 10Mhz of spectrum, but could do it with 20Mhz easily.

We should hopefully have 3G by June in Central Illinois, according to my source. I'm not sure if this is a precursor to a buyout by Sprint or not.-----------

Hardware procurement tends to have relatively long lead times when there're only a small number of customers. If Sprint previously cut it's purchase rate of LTE base stations the manufacturer would have slowed its' production rate and now Sprint can't change it's mind and have a few thousand more delivered via next day freight. Deals like this just require a few suits to shake hands and pass a check to initiate; getting the deal signed is something where throwing money at the problem will help. The regulatory reviews and potential need to switch customers to different hardware after the deal is approved means that they need to start the deals well in advance of when they actually want to be able to do anything with the acquisitions.

As of 2011, the total population of Iowa was about 3.026 million. The total US population was about 311 million. That means Iowans make up just under 10% of the total population of the US.

I don't work for Sprint, but my friend does. I can tell you that Sprint has a LOT of Iowa customers and they also have the highest number of locations of any carrier in Iowa.

Just FYI: Iowa is not the corn field covered wasteland everyone thinks it is but thanks for making that assumption.

I assume the primary motivation is Sprint trying to fill a hole (or thin area) in its coverage.

Sprint has had notoriously horrible data service in Chicago for a while now. 3G is close to unusable; 4G is spotty right now (it isn't officially deployed), but we'd have to see how it holds up under a load.

I hope buying St Louis and Chicago covers the area in between. Illinois as a whole is notoriously bad for Sprint users, which is hilarious given how many Sprint stores we have. (My town alone has three, plus authorized retail at Best Buy.)

US Cellular has put out a website with a map showing what area is being affected; it's a relatively small fraction of their total PCS spectrum. I assume the primary motivation is Sprint trying to fill a hole (or thin area) in its coverage.

Based on your corporate access policies, this web site ( http://www.uscellularinfo.com/ ) has been blocked because it has been determined by Web Reputation Filters to be a security threat to your computer or the corporate network. This web site has been associated with malware/spyware.

Threat Type: phishingThreat Reason: Domain has unusually high traffic volume for a very recent registration. IP addresses are not typically used as legitimate web hosts.

US Cellular has put out a website with a map showing what area is being affected; it's a relatively small fraction of their total PCS spectrum. I assume the primary motivation is Sprint trying to fill a hole (or thin area) in its coverage.

Based on your corporate access policies, this web site ( http://www.uscellularinfo.com/ ) has been blocked because it has been determined by Web Reputation Filters to be a security threat to your computer or the corporate network. This web site has been associated with malware/spyware.

Threat Type: phishingThreat Reason: Domain has unusually high traffic volume for a very recent registration. IP addresses are not typically used as legitimate web hosts.

The address came from Sprints press release. I think your employer's(?) filter just faceplanted.

Ghost Red, you might want to check that math again. 3 million out of 311 million is under 1%.

He must be using Karl Rove math. :-)

Doh! [faceslap]

You're right. Still, a VERY larger percentage of wireless customers in Iowa are on Sprint. Part of it has to do with corporate agreements/discounts and the fact that there are a lot of companies who use to/still use the "push to talk" Nextel feature, esp. construction companies, of which there are a TON in the larger cities.